Shortly after the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, some reporters seized on a provision that harmonized tax treatment of net operating losses, declaring it a “bonanza” for the wealthy. Missed (or conveniently ignored) by these same reporters is the fact that both versions of relief packages introduced by House Democrats include provisions that are substantially similar to what became law in the CARES Act.

The policy in question has its roots in the Tax Cuts and Jobs Act (TCJA), the tax reform law of 2017. As part of an effort to keep the budget impact within the bounds allowed by budget reconciliation rules, the TCJA limited net operating losses (NOLs) for C corporations to 80 percent in a given year, and eliminated carrybacks, while making carryforwards unlimited. Pass-throughs, businesses whose taxes are paid through the individual income tax code, saw NOLs limited to $250,000 for single filers (or double that for married couples), though they could carry forward NOLs to future years.

The TCJA included many good changes, but this was not one of them. NOLs account for the whims of the business cycle, allowing businesses to smooth out losses over multiple years. Without NOL provisions, businesses with high variance in annual profits would face high taxes in good years and be hung out to dry in bad ones.

To see how this works, take a simplified example in which a business orders $50 worth of product in January to sell for $100 in February. Were that business to face a 20 percent effective tax rate on its profits that year, it would pay 20 percent of the $50 it made, or $10.

But imagine that same business stocked up the same $50 in product in December instead, again selling for $100 in February. Without allowance for NOLs, that business would be seen as having made a profit of $100, as the expense came the year before. As such, it would owe twice as much in corporate income taxes, or $20, on the very same profit stream. Clearly, NOL provisions are not a “bonanza” or a “giveaway,” they are a necessary element of sound tax policy.

In recognition of this, and in particular the fact that businesses are unfortunately going to be realizing more operating losses during a recession, the CARES Act addressed many of the changes made in the TCJA. The 80 percent cap on NOLs was lifted for C corporations. For 2018, 2019 and 2020, losses could be carried back up to five years, and the pass-through caps were lifted.

It’s true that the changes mentioned above will primarily benefit high-income filers, but that does not make it a carve-out. The pass-through caps and restrictions that the CARES Act lifted only affected high-income earners in the first place — lower-income earners faced no such barriers to claiming NOLs.

Though some news coverage would give you the impression this was a partisan effort to shower the rich with tax breaks, the fact is that House Democrats also clearly recognize the importance of expanding the allowable use of NOLs. Their initial draft of a response package, the Take Responsibility for Workers and Families Act introduced in March, and their newest $3 trillion aid bill, the recently unveiled “HEROES Act,” both contain language expanding NOLs. Though their expansions were not as comprehensive as the CARES Act, notably by disallowing NOLs for companies that engaged in significant stock buybacks, they both shared a core provision allowing more carrybacks to ease tax burdens in the face of this pandemic.

Yet this fact didn’t stop reporters and commentators from presenting the CARES Act language as another special carveout for the wealthy. Tax policy can be complicated at times, but the media does taxpayers a disservice by dumbing down its analysis of good policy tax provisions to politically familiar tropes of “loopholes” and “handouts.”

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.